Tucker v McKee

23 Mr Tucker contends that the first row of the Guide (referring to a "Fee on Brief") is the relevant part. Based on those parts of the Guide he submits that the maximum recoverable amount with respect to the State parties' counsels' fees is $12,750, comprised of: (a) $7,650 for Ms Enbom QC; and (b) $5,100 for Mr Hooper of junior counsel. 24 He argues that the State parties seek security based on their own self-appraisal of party-party counsels' fees, based on counsel's estimates rather than by reference to the Federal Court scale, as set out in the Guide. 25 He submits that the Registrar erred in her approach to the Guide. Because the review application requires the Court to consider the application afresh, his assertions of error by the Registrar are not directly applicable, but they are useful in elucidating his argument. He submits that the Registrar fell into error in allowing counsels' fees of $34,650 for preparation of the appeal and $10,450 for counsels' attendance at the appeal hearing, when the Guide expressly caps the fees for counsels' appearances and preparation at $12,750. He says that the Registrar was wrong in stating that the Guide "broadly" contemplates counsel's fees in circumstances where, on his argument, the Guide "precisely identifies the specific range of rates applicable to specific matters including one-day hearings." He submits that the Guide does not support a construction that the rates in the Guide are liable to be interpreted liberally or are "beholden to a 'broad' and nebulous discretion". 26 Mr Tucker also submits that the Registrar erred in allowing costs for senior counsel to receive judgment, querying why it could not have been done by junior counsel or the instructing solicitor given judgments are delivered by email or by video-link in a matter of minutes. 27 Third, Mr Tucker submits that his appeal is bound to succeed. He submits that: (a) an important issue before the primary judge was whether Mr McKee's allegedly defamatory email had been disseminated interstate or overseas such as to attract the Court's jurisdiction. He says that when the State parties refused to produce documents evidencing the extent of publication of the email, he filed an interlocutory application dated 29 April 2020 seeking production of those documents. He contends that the primary judge "entirely ignored" and did not determine the interlocutory application by which Mr Tucker attempted to obtain evidence which was in the State parties' hands; and notwithstanding that the primary judge later held that he was not satisfied on the evidence that the email was in fact published outside Victoria: see Tucker v McKee [2021] FCA 828 at [44]; (b) he directly raised the application of the cross-vesting legislation to the proceeding, and the issue of whether the Court was obliged to transfer the proceeding to a state court if it had any legitimate concerns regarding jurisdiction. He says that the primary judge called for submissions on that issue, which the parties subsequently filed, but his Honour then disregarded the question of cross-vesting and, without explanation, dismissed the proceeding outright; and (c) the primary judge decided that two discrete allegations in the defamation claim were "colourable", being (a) Mr McKee's express allegation that Mr Tucker had breached an enterprise agreement and, (b) the imputation that in breaching an enterprise agreement he breached s 50 of the FW Act. Mr Tucker says that the State parties never raised the notion that his claims were "colourable" as an issue and that an allegation of improper purpose was never put to him. He relies on the observations of Lee J in Mulley v Hayes [2021] FCA 1111 at [71]-[74] to the effect that if the Court is to rely upon an allegation of improper purpose and thus "colouring" to oust jurisdiction, then the allegation must be raised so that the claimant has notice of it and can respond. Accordingly, Mr Tucker submits that the quantum of security should be further reduced to reflect what he describes as his "very good prospects of success" in the appeal. 28 Fourth, Mr Tucker submits that the State parties have failed to mitigate their costs in the matter. He argues that the State parties refused to budge on their initial demand for security of $60,000, and described Mr Tucker's first attempt to offer security as being "derisory". On his argument, had the State parties accepted his initial offer they would have saved over $60,000 (comprising $36,745 spent on their initial application for security and $23,980 spent on their application for additional security). Instead, the Registrar awarded security of less than half the amount they sought, and the State parties have entirely wasted over $30,000 to date on counsels' fees. 29 In written submissions he says that, at present, the State parties have no security for costs and that they "will not get security of more than $5,985" (emphasis in original). That last assertion is based on his solicitor's letter to the State parties dated 15 March 2022 which said that the firm had "clear instructions that if security of more than $5,985 is ordered, the proceeding will be permanently stayed." In oral submissions Mr Tucker submits that he cannot pay any more than $5,985, but he accepts that he has put on no evidence as to that. 30 Mr Tucker argues that the State parties, which have unlimited funds, are using the security application to bully, intimidate and suppress his legitimate claim which he has attempted to settle. For that reason too he contends that the Court should further reduce the amount of security ordered. 31 Fifth, he submits that the "general injustice" in the matter is a factor as to why he should not be denied access to justice through an order for security in an amount greater than $5,985. He contends that the Court should acknowledge the "appalling conduct" of Mr McKee and the State of Victoria in raising and publishing "utterly false allegations" against him, a relatively young man with young children. Mr Tucker describes the alleged behaviour as "heinous and moral[ly] depraved conduct" including sexual harassment, and notes that the alleged victim has provided evidence that she never made a complaint against him and has expressly advised Mr McKee of the falsity of the allegations. He argues that this justifies a further reduction in the amount of security ordered.

Consideration 32 It is common ground that the review application requires a hearing de novo and that the Court must decide the quantum of security afresh: 3Bears Childcare Centre Pty Ltd v Deputy Commissioner of Taxation [2018] FCA 1690 at [13] (Gleeson J); West International v Ultradrilling Pty Ltd [2008] FCA 1443 at [6] (Gordon J). As the party seeking security for costs, the State parties have the onus. 33 The legal principles in relation to fixing an appropriate sum for security for costs are well-established. It involves a "broad brush" assessment for the purpose of fixing an amount of security that is "sufficient". It does not involve a full assessment of the respondent's costs: Pathway Investments Pty Ltd and Ors v National Australia Bank Limited [2012] VSC 97 at [37] (Davies J); Davaria Pty Ltd v 7-Eleven Stores Pty Ltd (No 5) [2020] FCA 953 at [10] (Middleton J). In undertaking a broad brush assessment of future costs, the Court should have regard to the probable costs to which the respondent will be put to insofar as they can be ascertained: Farmitalia Carlo Erba SrL v Delta West Pty Ltd [1994] FCA 88; 28 IPR 336 at 343-4 (Heerey J). It is not the Court's task to undertake anything in the nature of the taxation of the respondent's costs (see, e.g. Premier Building & Consulting Pty Ltd v Spotless Group Ltd (No 5) [2005] VSC 19 at [5]-[6] (Byrne J); Oswal v Australia and New Zealand Banking Group Ltd [2016] VSC 119 at [8]-[13] (Sifris J)); instead the Court's task is to identify an amount that is not an "exact assessment" but is "broadly reasonable": Southern Equity Pty Ltd v Timevale Pty Ltd [2015] FCA 1364 at [49]-[50]; see also Kayler-Thomson v Colonial First State Investments Ltd [2020] FCA 1867 at [114] (Beach J). In Bryan E Fencott & Assocs Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 515 French J (as his Honour then was) said that the process of estimation embodies to a considerable extent, necessary reliance on the "feel" of the case after considering relevant factors. 34 The State parties contend that, in the main, the Court should take the same approach as that taken by the Registrar below. They submit that Mr Tucker should be ordered to provide security for costs in an amount no less than the $28,490 ordered. 35 I do not accept Mr Tucker's approach to the construction of the Guide, and I can see no merit in his submission that the appropriate amount of security for costs to be ordered is no more than $5,985. As I have said, he submits, but put on no evidence to the effect that he is unable to pay more than $5,985 in security, nor that an order for security in a greater amount is likely to stultify the proceeding. For the reasons I explain, I am satisfied that it is appropriate to order that he provide security in the sum of $28,490, within seven days. 36 First, the Guide is only a guide to the assessment of costs. Considered at a high level, if successful in the proceeding, the State parties will be entitled to their party-party costs, being the costs fairly and reasonably incurred in the conduct of the appeal: see rr 40.01 and 40.02 of the Rules and the definition of "costs" in the dictionary at Schedule 1 to the Rules. 37 Clause 16.1 of Sch. 3 of the Rules provides that "an amount may be allowed for counsel's fees according to the circumstances of the case" (emphasis added). Thus, as assessment of what counsel's fees are fair and reasonable, and therefore recoverable on a party-party basis, must be determined having regard to the circumstances of the proceeding, which will include its complexity. 38 By reference to the notice of appeal and Mr Tucker's submissions, I am satisfied that the appeal raises factual and legal issues of some complexity. The issues in the appeal include whether the primary judge erred: (a) in not concluding that the defamation proceeding was in relation to a matter arising under the FW Act, within the meaning of s 39B(1A)(c) of the Judiciary Act 1903 (Cth); (b) in not finding that in the context of a defamation claim the incorporation of one party under the Corporations Act 2001 (Cth) was, in and of itself, enough to attract federal jurisdiction; (c) in engaging in speculation to conclude that the allegedly defamatory email was not published outside Victoria in circumstances where the primary judge did not hear evidence about who is in possession of the email and did not decide Mr Tucker's interlocutory application seeking discovery of documents evidencing publication outside of Victoria; (d) in engaging in speculation as to whether the alleged imputation that Mr Tucker had breached s 50 of the FW Act was capable of being conveyed given the circumstances set out in (c) above; (e) by taking into account irrelevant considerations, including Mr Tucker's profession and experience; (f) in finding that two of the defamatory imputations pleaded in the amended statement of claim were colourable; that is, made with an improper purpose in an attempt to invoke jurisdiction, when that assertion was not raised by the State parties and not put to Mr Tucker; and (g) in ordering Mr Tucker to pay the State parties' costs of the proceeding, as the proceeding was a matter arising under the FW Act and therefore the special costs regime in s 570 of that Act applied. 39 Having regard to these issues and taking a conservative approach to the State parties' costs, in my view it is appropriate to allow senior counsel three days preparation for the appeal hearing, and junior counsel four days preparation, as the Registrar did. It is also appropriate to allow senior and junior counsel's fees at the daily and hourly rates that they have charged and propose to charge. Taking a conservative view of the recoverable counsels' fees, I estimate party-party costs at $56,980, as the Registrar did. 40 Second, Mr Tucker's argument that the Guide sets a cap or upper limit on party-party counsel's fees is based on a misreading of the Guide. The Guide does not provide that, for a one-day appeal, the successful party is only entitled to recover a one-day fee for each counsel including preparation capped at a maximum of $5,100 for junior counsel and $7,650 for senior counsel. 41 Instead, the Guide provides for two alternative approaches to assessing counsel's fees on a party-party basis. That the Guide allows two alternative approaches is made plain by the word "OR" which appears between the two alternatives in the first row of the Guide: see Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) [2011] FCA 661 at [49] (Logan J). 42 The first approach provided by the Guide is to allow a "Fee on Brief" which is a single fee which includes the cost of appearance on the first day of the hearing, and an amount for preparation at the discretion of the taxing officer. Contrary to Mr Tucker's argument, the question as to whether some or all of counsel's preparation is to be included as part of the "Fee on Brief" is a matter for the taxing officer's discretion. Thus it cannot reasonably be said that the overall amounts allowed for junior and senior counsel are capped at a maximum of $5,100 and $7,650 respectively. As Logan J explained in Wide Bay at [57]: The fee on brief (or brief fee) basis, as the associated, parenthetical note in the National Guide indicates, includes, "preparation at discretion of taxing officer and appearance on the first day of a hearing". A fee on brief for the first day includes not only the appearance on the first day but also an allowance for pre-appearance preparation whether on that same day or beforehand. Again, [a] taxing officer has a discretion to allow more in respect of preparatory work than that implicit in the fee on brief for the first day of a trial. (Emphasis added.) 43 The second approach provided by the Guide, which the Registrar took below, is to allow a fee for "Appearance at hearing (daily rate including conference)" and to allow fees on hourly rates for "preparation time" on top the appearance fee. The Guide expressly allows this approach by providing lower daily rates for counsel for an appearance at a hearing (including a conference) and also allowing recovery of hourly rates charged by counsel for "preparation time" on top of the daily rate for the appearance. Mr Price gave unchallenged evidence that Ms Enbom QC and Mr Hooper are retained on the basis of their charging daily rates for appearance at a hearing by counsel plus hourly rates for preparation time. He was not cross-examined on that evidence. 44 Third, Ms Enbom's daily rate fee is higher by $750 than the range specified in the "appearance at hearing" section of the Guide, but taking a "broad brush" view that is not a matter of significance when the great bulk of the fees are based on hourly rates rather than daily rates. The Guide does not cap or set a maximum on the amount that will be allowed for party-party counsel's fees on a taxation. At the time Wide Bay was decided (as Logan J noted at [50]) a note by the Registrar of the Federal Court which was appended to the Guide said that "[t]he amounts listed are not to be regarded as limiting the taxing officer's discretion to allow higher or lower fees if it is considered appropriate": see National Guide to Counsel Fees as at 13 December 2002: see . Although that note is not appended to the current Guide, there is nothing to indicate that those comments no longer apply. Indeed, the current "Guide to Discretionary Items in Bills of Costs" relevantly states that with party and party bills of costs, taxing officers apply a "fair and reasonable" test to all claims, including any disbursement claim. The Registar of the Federal Court states that while the guide there set out may be used by a taxing officer, "[it] is not, however, to be regarded as limiting the taxing officer's discretion to allow higher or lower fees or disbursements if it is considered appropriate": see . 45 Fourth, Mr Tucker's contention that the Registrar erred in allowing counsel's fees for senior counsel to receive judgments on the appeal and the security for costs application is based on a misunderstanding. The Registrar did not allow any counsels' fees for receiving judgment on the security application; she allowed two hours for senior counsel for receiving judgment on the appeal and nothing for junior counsel. Conservatively, I would allow senior counsel two hours to read the appeal judgment, and to provide advice about any orders to be sought including in relation to costs. 46 Fifth, I do not accept Mr Tucker's contention that the security amount to be ordered should be reduced by more than 50% from my estimate of the State parties' party-party costs having regard to (a) his asserted good prospects of establishing that the costs in the appeal are covered by the special costs regime prescribed by s 570 of the FW Act; (b) his asserted good prospects of success in the appeal; (c) the asserted failure of the State parties to mitigate their costs; and (d) the "general injustice" in the matter. It is noteworthy that if Mr Tucker's contention that the security should be no more than $5,985 is to be accepted, that would require a reduction of almost 90% from my estimate of party-party costs. 47 The authorities indicate that the prospect of success of a proceeding is a factor to which the Court may have regard when assessing whether security for costs ought be awarded (Soh v Commonwealth of Australia [2008] FCA 1524 at [10] (Moore J); Clack v Collins (No 1) [2010] FCA 513 at [13] (Jagot J)); but it may not be appropriate for the Court to undertake that assessment, depending on the stage of the proceeding: see, e.g. Nyoni Pharmacy Board of Australia [2018] FCA 1313 at [19] (White J). It is a different question when prospects of success are put forward as the basis for ordering a reduced amount of security. Having said that, I can accept that the prospects of success may be relevant to the security amount to be ordered, particularly when, if Mr Tucker can establish that the proceeding is covered by the special costs regime under the FW Act it is unlikely that he will be required to pay any of the State parties' costs. 48 However, while on Mr Tucker's submissions some of the appeal grounds appear to have merit, it is impossible to make a proper assessment. Amongst other things, Mr Tucker put on very little to allow an adequate assessment and the State parties put on nothing. I do not, for example, have the transcript of the hearing below, the written submissions filed below, a copy of the interlocutory application seeking further discovery, the transcript of any case management or interlocutory hearing(s) in relation to the application for further discovery, a copy of the documents the State parties produced relevant to the place of publication of the allegedly defamatory email, or a copy of the witness statements that were filed relevant to the place of publication of the allegedly defamatory email. 49 The authorities also show that in setting security for costs a reduction to the party-party costs estimate may be applied to reflect the vicissitudes of litigation such as the possibility of settlement, the merits of the case, the possibility of off-setting future costs orders, the risk that the litigation may be stifled and so on: Voxson Pty Ltd v Telstra Corporation Ltd (No 8) [2017] FCA 1427 and [17] (Perram J); Norcast S.r.L v Bradken Ltd & Others [2012] FCA 765 at [25]-[28] (Gordon J). The amount of any reduction is not fixed, but is discretionary and may vary as circumstances dictate: Norcast at [28] citing Pathway Investments at [55]. There is some force in the State parties' argument that in allowing a reduction of 50% the Registrar applied a greater discount than was appropriate, because, in the circumstances many matters which might ordinarily justify the discount did not exist; namely; (a) a likelihood of the appeal settling; (b) the possibility that substantial amounts may be taxed off the bill of costs; and (c) the prospect or actuality of off-setting costs orders. But in circumstances where the State parties did not ask the Court to set security for costs at more than the $28,490 ordered by the Registrar there is no need to go further into that question. 50 I can see little merit in Mr Tucker's submission that the State parties have failed to mitigate their costs. It is perhaps open to criticise the State parties for seeking security in the amount of $60,000, which is at the upper end of the range I estimate to be reasonable. But a similar criticism can be made of Mr Tucker. His contention that security of $5,985 is appropriate is unrealistic, and he has maintained that position throughout. Further, his contention that the State "refused to budge on their initial demand" is incorrect. The Third Price Affidavit and the Second Raso Affidavit show that the State parties offered to accept security in the reduced amount of $25,000 which Mr Tucker did not accept. Before me, notwithstanding that it would have been available to them to do so, the State parties did not seek security of more than the $28,490 ordered by the Registrar. 51 Nor am I persuaded that there is any force in the contention that the amount of security should be reduced having regard to the "general injustice" of the matter. I am not in a position to judge where the justice or injustice lies. 52 Sixth, although Mr Tucker submits he is unable to pay more than $5,985, there is nothing in the evidence to show that, and he concedes that he made a forensic decision not to put on any evidence as to his financial and asset position. If Mr Tucker had established an inability to pay a greater security amount that would have been a relevant consideration in fixing the appropriate security amount; but his unwillingness to pay is not. 53 Standing back from the dispute, taking a broad brush approach, and one that is favourable to Mr Tucker, I consider that reducing the security amount by 50% from my estimate of party-party costs is reasonable in all the circumstances. Putting to one side the request for additional security, I have determined, as the Registrar did, that Mr Tucker must provide security in the amount of $28,490 and I have ordered that he do so within seven days. That may seem a short period, but in the case management hearing on 8 March 2022 the parties were informed that, because of the impending appeal hearing, any security that was ordered would be required to be speedily provided.

[1994] FCA 88

[2016] VSC 119

[2005] VSC 19

(1987) 16 FCR 497

[2021] FCA 1111

[2018] FCA 1313

[2008] FCA 1443

[2011] FCA 661

[2010] FCA 513

[2020] FCA 953

[2020] FCA 1867

[2012] FCA 765

[2012] VSC 97

[2008] FCA 1524

[2015] FCA 1364

[2001] FCA 1603

[2017] FCA 1427

[2017] FCA 312